Hospitality unicorn OYO has raised INR 54 Cr (over $7.5 Mn) from Hindustan Media Ventures as part of Series F1 round, according to a regulatory filing by the company. Hindustan Media Ventures is majority owned by HT Media Ltd, which publishes Hindustan Times among other publications.
The corporate venture fund subscribed to 125 Series F1 Compulsory Convertible Cumulative Preference Shares (Series F1 CCCPS) totalling INR 54 Cr through a private placement offer, according to the filing to Registrar of Companies. ET first reported the development.
Last month, OYO laid off around 300 employees this month, according to sources close to the company. While other reports claimed that the company has laid off 600-800 employees, an OYO spokesperson told Inc42, “We have done no significant restructuring at this point in time. There are some localised actions basis change in business models and our move towards product and technology to serve our partners and customers keeping in mind the current business realities.”
The fundraise from HT Media’s Hindustan Media Ventures comes at a time when OYO claims to be recovering after a brutal 2020, which saw severe revenue slowdown as well as job cutbacks. In a report in WSJ this week, OYO said it has $1 Bn in cash and cash equivalent to navigate the post-pandemic market. The hospitality unicorn claims to have 43K hotels and 1.5 Lakh holiday and vacation homes in over 800 cities in 80 countries.
OYO founder and CEO Ritesh Agarwal had said in April 2020 that there was a 50% to 60% drop in occupancy rate and revenue. He had also specified that the company’s balance sheet had come under severe stress. As per layoff tracker Layoffs.fyi which crowdsources information related to cutbacks, OYO’s revenue was at about 30% of its pre-Covid levels. The decline led to salary cuts, furloughs and layoffs in all 80 markets that OYO operates in.
In March 2020, a week before the lockdown in India, OYO raised $806.75 Mn funding from existing investors SoftBank and founder Ritesh Agarwal owned RA Hospitality Holdings. The investment is the first tranche of $1.5 Bn Series F round, which was announced in October 2019.
In September, Softbank’s CEO Rajeev Misra said OYO had reduced its monthly expenses by nearly $70 Mn from $100 Mn pre-Covid to $30 Mn. The company is also clocking in nearly $25-30 Mn per month, and is achieving break-even, he had added.